Director Of United States Cellular Makes $121K Buy

A significant insider buy by Cecelia Stewart, Director at United States Cellular USM, was executed on May 22, and reported in the recent SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Wednesday showed that Stewart purchased 2,836 shares of United States Cellular. The total transaction amounted to $121,976.

As of Thursday morning, United States Cellular shares are down by 0.0%, currently priced at $43.68.

Delving into United States Cellular's Background

U.S. Cellular is a regional wireless carrier that serves about 4.5 million customers spread across four major geographic clusters: the Midwest, mid-Atlantic, New England, and the Pacific Northwest. These service territories encompass a total population of about 32 million people. The vast majority of the markets the firm serves are rural or second/third-tier cities, with only the greater Milwaukee and Oklahoma City regions boasting populations greater than 1 million. U.S. Cellular also owns a 5.5% stake in Verizon Wireless' Los Angeles operations and, unlike its wireless carrier peers, owns most of its own towers.

United States Cellular's Financial Performance

Revenue Challenges: United States Cellular's revenue growth over 3 months faced difficulties. As of 31 March, 2024, the company experienced a decline of approximately -3.65%. This indicates a decrease in top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Communication Services sector.

Navigating Financial Profits:

• Gross Margin: The company faces challenges with a low gross margin of 58.11%, suggesting potential difficulties in cost control and profitability compared to its peers.

• Earnings per Share (EPS): United States Cellular's EPS is below the industry average, signaling challenges in bottom-line performance with a current EPS of 0.21.

Debt Management: United States Cellular's debt-to-equity ratio is below the industry average at 0.86, reflecting a lower dependency on debt financing and a more conservative financial approach.

Assessing Valuation Metrics:

• Price to Earnings (P/E) Ratio: The P/E ratio of 64.24 is lower than the industry average, implying a discounted valuation for United States Cellular's stock.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.99, which is lower than the industry average. This suggests a possible undervaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an impressive EV/EBITDA ratio of 7.68, United States Cellular demonstrates exemplary market valuation, surpassing industry averages.

Market Capitalization Analysis: Falling below industry benchmarks, the company's market capitalization reflects a reduced size compared to peers. This positioning may be influenced by factors such as growth expectations or operational capacity.

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Why Insider Transactions Are Key in Investment Decisions

While insider transactions should not be the sole basis for making investment decisions, they can play a significant role in an investor's decision-making process.

In legal terms, an "insider" refers to any officer, director, or beneficial owner of more than ten percent of a company's equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

Essential Transaction Codes Unveiled

When dissecting transactions, the focal point for investors is often those occurring in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of United States Cellular's Insider Trades.

This article was generated by Benzinga's automated content engine and reviewed by an editor.